RESPA: Both Feet in the Tar Baby.
Posted By Cliff Tuttle | June 30, 2010
No. 462
HUD has just issued another interpretive ruling on RESPA kickback rules. A real estate agent cannot accept compensation for “marketing” home warranties, but she can be paid for real services, like performing preliminary inspections.
It is surprising that HUD hasn’t just given up. Some years ago, they rewrote the regs to enable real estate brokerage conglomerates to pay internal kickbacks. But once Brer Rabbit got one foot stuck in the Tar Baby, he tried to use the other foot to extract himself and very soon he was stuck. HUD has both feet in the Tar Baby. Plus, enforcement of the rules has been so rare that there really aren’t any rules. The only solution, as far as we see it is to throw HUD and its reg book into the briar patch.
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